Planning Commission asks staff to draft ordinance options for downtown diverse-housing requirement including fee-in-lieu, transfers and bonuses

The East Lansing Planning Commission voted to ask city staff to prepare draft ordinance language to explore several changes to the city’s downtown diverse housing requirement, including area-for transfers, a fee‑in‑lieu option, whether Housing Choice Voucher (Section 8) units should count as affordable units, and whether developers could receive height or bonus-unit incentives in exchange for meeting diverse‑housing targets.

Planning staff framed the item as a continuation of prior meetings. Landon Bartley said the discussion builds on the city’s existing requirement that 25% of certain new multifamily downtown units be “diverse” (owner‑occupied, affordable, 55+ or other types determined case‑by‑case) and on a council action that recently restricted some credit transfers when projects receive public financing (Ordinance 15‑46).

Public commenter Carrie Freeman, who represents private parties proposing downtown projects, urged the commission to refer at least the fee‑in‑lieu and related options to council so proponents could present information there. Freeman noted the Howard project as an example: “doing the Howard project, you'd have $2,000,000 going into a fund which then maybe you could create some kind of voucher program,” she said.

Staff said their survey of other cities shows wide variation in fee amounts; commission discussion noted that $5,000 per unit — a figure suggested by some advocates and repeated in packet materials — is much lower than comparable programs in other municipalities. Planning intern Sonia Koenig told commissioners, “if it’s a lower fee, then it’s going to incentivize developers to just pay that fee and get out of it. But if you raise up that fee, it incentivizes a little bit more of the mixed income housing.”

DDA Executive Director Marcia Gaborowski spoke to downtown conditions and business concerns, saying summer business had suffered and that increased downtown residential density could support year‑round commerce.

After discussion the commission moved, and by majority vote directed staff to draft potential ordinances covering the four concepts (area transfers, fee‑in‑lieu, Housing Choice Vouchers, and prioritizing diverse housing types) and to explore height/bonus‑unit incentives and the interplay with tax abatement/taxable value freezes. Commissioners added a caveat asking staff to consider fee amounts higher than $5,000 per unit and to report comparative examples from other Michigan cities when the drafts return to commission.

The commission did not set a specific dollar figure or adopt ordinance language; the action directs staff to prepare options for City Council consideration and for later planning commission review.